The ceasefire agreement between the United States and Iran, signed four weeks ago, is severely shaken following Iran's strong reaction to the US "Freedom Project". US President Donald Trump announced on 3/5 an operation to guide commercial ships through the Strait of Hormuz, labeling it a "humanitarian gesture".
The situation escalated with several cargo ships attacked in the region, including a South Korean vessel. The United Arab Emirates (UAE) reported that Iran launched missiles and drones at a major oil port in Fujairah, strategically located near the strait. This port is crucial as it offers one of the few Middle Eastern oil export routes bypassing the Strait of Hormuz.
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A commercial vessel moves through the Strait of Hormuz, seen from Oman on 8/4. Photo: AFP |
This marks the largest escalation since the ceasefire was announced. Shipping traffic has not increased. Despite the US stating two of its merchant ships crossed the strait, Iran denied these claims. The US also reported destroying at least six Iranian boats, a claim Iran continues to reject.
The shipping industry remains hesitant, with Tim Huxley, chairman of Mandarin Shipping, stating on 4/5, "This strait remains extremely dangerous, and I anticipate the majority of vessels will continue to avoid passage here until both sides reach a more concrete agreement."
Industry leaders express confusion due to the lack of specific plan details from President Trump or the US Central Command. Meanwhile, Tehran insists cargo ships and oil tankers must coordinate with its armed forces, warning that US forces entering the Strait of Hormuz would face attack.
Adding to the uncertainty, Simon Kaye, global reinsurance director at NorthStandard, a company providing liability insurance for most of the world's transport fleet, noted, "It is unclear which nation requested this humanitarian mission, nor is it clear what coordination is required with the Iranian side."
As the shipping industry awaits clearer plans from the US and Iran, oil prices continue to surge. Gasoline prices in the US reached 4,46 USD/gallon, the highest in nearly four years. An oil market expert suggested prices could hit 5 USD/gallon if the Strait of Hormuz remains closed.
Hong Hanh (According to CNN)
